Corporate Power & Globalization

8162019 Corporate Power amp Globalization

httpslidepdfcomreaderfullcorporate-power-globalization 123

InternationalJournal of SocialEconomics

299

730

InternationalJournal of SocialEconomics Vol 29 No 9 2002pp 730-752 MCB UP Limited0306-8293DOI 10110803068290210442739

Corporate power and theglobalization process

Richard L Brinkman and June E Brinkman Portland State University Portland Oregon USA

Keywords Globalization Sociotechnics Corporate strategy

Abstract Looks partially toward a conceptual clarification of globalization interrelated tocorporate power The global economy has experienced structural transformation over time Anintegrated network of world trade has evolved in the context of two separate stages Stage oneappeared during the period of the 1870s The second stage appeared during the post Second World War era To distinguish this period from stage one the process of structural transformation now taking place is conceptualized and demarcated as corporate globalization

Given the growing increase in size power and dominance of the MNCs the locus of sovereignty iscurrently being questioned An issue currently being raised relates to whether or not nation statesor MNCs will be in control of the globalization process Interjects and analyses the theory and

policy of free trade all of which is contained in a paradigm of culture evolution fed by thedynamics of technological change and economic development

Globalization the dynamics of structural transformationGlobalization a major current buzzword constitutes one of the most significantand dominating developments of the post-Second World War era As yethowever there apparently is no agreed on consensus-conception of globalization appearing in the literature The lack of conceptual clarification in

turn obfuscates questions to be raised problems to be addressed and from thispolicy and resolution Consequently the multiplicity of differing conceptionsthat are offered in the basic literature is also manifest in an ambiguity of analysis and theory

Evidence in support of this lack of consensus is readily revealed in the manyalternative conceptions of globalization which appear in the literature[1] ``Thedefinitional nature empirical character and ultimate significance of interdependence and globalisation are all matters of considerable controversyand confusionrsquorsquo (Jones 1995 pp 4 219) As a general viewpoint interpretationsas to what globalization entails appear as a basic polarity in the literature Onthe one hand ` globalization is seen negatively and at times almostdemonically as the dominance of Western economic and cultural interests overthe rest of the world the perpetuation of inequality between the rich andpoor countries and regionsrsquorsquo On the other hand another view offered is of``globalization as a triumphalist light as the penetration of capitalism intoevery corner of the world bringing with it the possibility for all of the worldrsquospopulation to participate in the fruits of the international division of labor andmarket economyrsquorsquo (Holton 1998 pp 2-3 10-19 Gilpin 2000 pp 293-324)

But there are in addition many attempts at specific definitions of

globalization interrelated to integration interdependence internationalizationand on One conception relates to globalization ` understood as the

T h e c u r r e n t i s s u e a n d f u l l t e x t a r c h i v e o f t h i s j o u r n a l i s a v a i l a b l e a t

h t t p w w w e m e r a ld i n s i g h t c o m 0 3 0 6 - 8 2 9 3 h t m



Corporatepower

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phenomenon by which markets and production in different countries arebecoming increasingly interdependent due to the dynamics of trade in goodsand services and the flows of capital and technologyrsquorsquo (OECD 1993 p 7) Whilesuch a market-oriented conceptualization appears relevant it does not go far

enough to include the social and cultural variables impacted by theglobalization process It also conceals the dynamics of structuraltransformation which have taken place over time in the evolution of whatmight be called a global economy The global economy has evolved over timeand that evolution is predicated on structural transformation

One approach toward a conceptual clarification is to draw a distinctionbetween two ideal types depicted as an international economy on the one handversus a globalized economy on the other (Hirst and Thompson 1996 pp 1-17Holton 1998 pp 23-4 42-9) In these two diverse models Hirst and Thompsonput forward the view that globalization constitutes a juggernaut of uncontrollable free-market forces In Globalization in Question they argue thatthis conception of globalization constitutes a myth not reality and that it `` robs us of hope rsquorsquo and amelioration from market failures in terms of governance at the national level A more relevant model is to depict the currentglobal economy as an international economy `` in which the principle [ sic]entities are national economiesrsquorsquo and still consequently capable of control andgovernance (Hirst and Thompson 1996 pp 2 6 8)

It is however still arguable that the global economy is none the less currentlyin a state of transition toward a new structure of international interdependenceled by MNC dominance and control And as such this process of globalizationso dominated constitutes a potential to unleash the inexorable force of freemarkets superseding national control If this view is correct the current globaleconomy is evolving toward the polarity of what might be called not simplyglobalization but rather corporate globalization Also that the locus of sovereignty might be conceivably shifting from the nation state to MNCshowever is not to assume that the process is irreversible and beyond thecapacity for national control and governance But this does not deny the factthat currently MNC power policy and values are increasingly coming todominate the global economy

Internationalization of national economies into what legitimately might becalled a global network of trade refers to a long-term process going back to themid nineteenth century This first stage took place in the context of nation-statesovereignty and control It refers to an interconnection of relatively distinctnational economies in which sovereignty was still predominantly relegated tothe nation state But a second stage manifest in a different structure is evolvingsomething new is taking place ``Globalization in its radical sense should betaken to mean the development of a new economic structure and not justconjectural change toward greater international trade and investment withinan existing set of economic relationsrsquorsquo (Hirst and Thompson 1996 p 7) What

constitutes this new structure And how then to analyze and explain that newstructure viewed as corporate globalization in relation to stage one




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732

To begin with while it is arguable that an overall consensus-conception of the globalization now taking place still eludes us there are still some specificaspects of globalization that might be agreed upon One aspect of apparentagreement relates to the fact that the phenomenon entails a great complexityGlobalization entails not simply the economic process and free markets inrelation to trade and competitiveness Globalization is also related and relevantto jobs the quality of life ecological concerns MNC power nation-statesovereignty and survival human rights and needs and on In terms of Polanyirsquos (1944) The Great Transformation there is need to bring into theparadigmatic boundaries of analysis the impact of the market and pricemechanism on society (Mittelman 1997 p 3 Soros 1998 pp v xx xxix)

Such a complexity embraces not simply the economic but also relates to theso-called ``noneconomicrsquorsquo in terms of social political and cultural dimensions

Consequently relevant analysis and theory obviously require aninterdisciplinary conception of the globalization process The scientificconception which deals with such a complexity of interrelated disciplinesresides in the anthropological conception of culture better known as ` thatcomplex wholersquorsquo[2] It is the anthropological conception of culture which servesas an interdisciplinary blender In this paper at the broadest level of generalization as to process and conception globalization constitutes a currentmanifestation of the ongoing dynamics of general culture diffusion Thisevolutionary process appears over time in a variety of forms and structures Inthis context international trade as an agency of this dynamic serves as an

`ùmbilical cord of culture diffusionrsquorsquo The question (to be addressed later in thispaper) becomes in Galbraithian terms who and or what controls this processand for which purpose

Globalization encompasses a spread of the complex dynamics of generalculture evolution and diffusion on a global scale But relevant to cultureevolution economics and the processes of globalization what is meant by adynamic process Dynamic economic analysis entails a metamorphosis as aprocess of structural transformation But transformation and changes of what``The major preoccupation of dynamic economics is the study of changes insocial phenomenon rsquorsquo and which is basically related to `` the technologicalelements in the economic systemrsquorsquo[3] This conception of a dynamic economicanalysis coincides with Myrdalrsquos (1974 p 729) conception of economicdevelopment as the `` movement upward of the entire social systemrsquorsquo Andagain it is culture as ``that complex wholersquorsquo which conceptually comprises theentire social system Culture evolves in a dynamic mold of structuraltransformation as a sequential process in which one ``Srsquorsquo curve is superimposedon the next as a series of ``logistic surgesrsquorsquo The growth process relates toquantitative increases within a given structure Development as anevolutionary process relates to the dynamics of structural transformation in a

sequential pattern of ``Srsquorsquo curves andor as ``logistic surgesrsquorsquo as one structuregives rise to the next (Brinkman 1995)



Corporatepower

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From a very long-term perspective trade even on a multilateral basis hasimpacted various parts of the world and promoted culture diffusion Primitivecultures (civilizations) of antiquity the city states of the past the Vikings andon all spread and diffused culture via a trading process (Hilgerdt 1943 p 397

Holton 1998 p 49 Pomeranz and Topik 1999) But globalization as anintegrated network involving ` the trade balances of almost all countries soas to constitute a world wide orbit is a formation of only about threegenerations oldrsquorsquo (League of Nations Secretariat 1942 p 84)

Our concern relates to the epoch of modern economic growth which hasexperienced two major stages in the evolving network of global trade The firststage had its origins during the 1870s and the second during the post-SecondWorld War era In the early stages of economic evolution and development thescope for trade was limited To speak of international trade for hunting andgathering societies or the great civilizations of antiquity would obviously be abit premature Trade in the early stages of cultural evolution affected local orregional areas International trade as trade among nation states could not havetaken place in that nation states were nonexistent The nation state as suchand relevant to international trade came into being during the stage known asthe Commercial Revolution (1350-1750)

And while ships did roam and trade globally and served as pre-conditions inthe evolution of capitalism and modern economic growth the trade which tookplace during the period of mercantilism obviously did not constitute anintegrated or interdependent global network The internationalization of nationaleconomies on a multilateral and global basis awaited the advent of the IndustrialRevolution and had its origins during the 1870s The multilateral trading whichevolved during the nineteenth century took place during the ``scientific epochrsquorsquowhich Kuznets called industrialism or an industrial system as the dynamics of modern economic growth ` a concept used to designate a wide application of knowledge based on empirical science to the problem of economic and socialtechnology the industrial system dates from one and a half to two centuriesagorsquorsquo (Kuznets 1954 pp 238-9) And it was during this period delineated as the``great dividersquorsquo that ``The Genesis of the Current Global Economic Systemrsquorsquo tookplace (Leavy-Livermore 1998 pp 3-28 Holton 1998 pp 42-9)

The two basic stages which internationalized nations into a global economytook place during the stage of economic development known as moderneconomic growth The first structure or stage was in the form of a multilateraltrading system which had its origins circa 1870s and the second marked by theBretton Woods era An empirical study The Network of World Trade (Leagueof Nations Secretariat 1942) delineated the global economy in terms of amultilateral trading system And while trilateral or multilateral trade as such` is likely to have existed from the time when trade advanced beyond thestage of barter rsquorsquo such trade did not constitute a global network (League of Nations Secretariat 1942 p 84 Hilgerdt 1943 p 397)

However a multilateral trading system embracing the global economy andas international trade embracing nation states had its origins in the late




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nineteenth century during the 1870s The network of this multilateral system isdepicted in Figures 1 and 2 Figure 1 shows the maturation of the system whichtook place during the 1920s A multilateral system of balances nurturingglobal interdependence evolved on a regional and national basis The USA hada deficit with the tropics which were covered with surpluses elsewhere TheUK (non-continental Europe) had a surplus with the tropics which in turncovered deficits elsewhere And in this manner trade balances wereinterconnected functioning overall as a global multilateral trading system

Analogous to the ` unfolding of a fanrsquorsquo as time passed more and more nationsbecame a part of the overall system The center or hub of the evolving wheel of interdependence resided in Europe the Worldrsquos Banker 1870-1914 (Feis 1930)And in this center the UK assumed a hegemonic role especially in the contextof the international gold standard The international gold standard provided

the financial glue which held it all togetherThat glue turned to water when trade and capital flows deteriorated betweenthe UK and the tropics This development which ``short-circuitedrsquorsquo the systemtook place during the early 1930s With the demise of the international goldstandard in 1931 the system ``disintegratedrsquorsquo and this is depicted in Figure 2showing a reduction in multilateral trade balances for the year 1938 (League of Nations Secretariat 1942 pp 89-95 Hilgerdt 1943 pp 400-4) Hardly anyaspect of a modern economy would not be affected by the ensuing collapse of

Figure 1The system of multilateral trade asreflected by theorientation of balancesof merchandise trade in

1928



Corporatepower

735

such an interdependent network of trade all of which interconnected to theGreat Depression

The next stage of internationalization took place during the post-SecondWorld War era And it is this period which in the context of this paper isreferred to as globalization and perhaps even more correctly conceptualized ascorporate globalization (Nader and Wallach 1996 p 94 Korten 1995Anderson et al 2000) In the immediate post-Second World War period BrettonWoods served to rejuvenate and reconstruct the collapsed nineteenth centurysystem of global trade The institutional adjustments which took placeappeared as a trilogy in the forms of the IMF GATT and the IBRampD[4] Again

the system was to be predicated on nation states as the basic building blocks of the new system though taking account of Article XXIV of GATT of Europersquosneeds for regional integration And GATT (1947) in turn was transformed intothe WTO (1995) which now comprises the global trading organization of thecurrent period

The statistics appear to indicate the success of the current stage of globalization now taking place Economic growth has increased during theperiod But trade increased at faster rates and private foreign direct investmentincreased at rates even faster than both economic growth and trade Given the

apparent positive statistics concerning the increased trade and growth why theGlobaphobia and the ` Battle in Seattlersquorsquo Why then the angst and discord

Figure 2The system of

multilateral trade asreflected by the

orientation of balancesof merchandise trade in

1938




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736

concerning the current dynamics of globalization now taking place under theauspices of the WTO It is also argued in the literature that while growth andeconomic development have been taking place the underlying problems of inequity in income distribution declining real wages stagnating family income

environmental degradation and a questionable improvement in the overallquality of life and on have produced a good deal of conflict discord and debate

The sovereignty issue the nation state versus the MNCAs long ago as 1969 and before the current issue of globalization surfaced assuch Kindleberger stated that `` the nation state is just about through as aneconomic unit rsquorsquo (Kindleberger 1969 p 209 Ohmae 1995 p 129) The nationstate to be noted along with the MNC does not simply serve as an economicunit but is obviously also interconnected to the political and social domain aswell Much has been written since 1969 in relation to Sovereignty at Bay

juxtaposing the growing power of the MNC as a major agency contesting thesovereignty of nation states[5] It is arguable and the position put forth in thispaper as well that this confrontation constitutes a basic core problem of thecurrent stage of global economic evolution called globalization

Analysis requires that a distinction should be drawn between the conceptsof sovereignty and power Sovereignty relates to the locus of power as asupreme authority be it the chieftain the monarch or king the nation state orthe MNC as sovereign An analysis of the locus of power now being contestedby the MNCs the megacorporations of the current period requires aclarification in turn of a meaning and conception of power Galbraith hasmade the subject of power a central focus of his long-term research effort It isGalbraithrsquos (1983 p xiii 1973a) contention that `` economics divorced fromconsideration of the exercise of power is without meaning and certainlywithout relevancersquorsquo And while power should be a central concern of economicsmainstream thought is more directed toward avoidance and obfuscation ratherthan clarification It hard to analyze power in a matrix confined to MR = MCMV = PQ and Y = C + I + G + X ndash M or Marshallian offer curves All of theseare static and devoid of social and cultural variables and the dynamics of structural transformation still less do such paradigmatic boundaries include a

conception of power relevant for analysisYet as Russell notes `Òf the infinite desires of man the chief are the desiresfor power and gloryrsquorsquo (Russell 1963 p 11 Galbraith 1983 p 1 Berle 1969p 59) The literature dealing with the subject of power is so large that it in turndefies cognizance by any one individual Therefore many definitions andconceptions of power are available It is frequently argued that power basicallyrelates to the capacity to control and dominate others in order to make thembehave and submit in ways which usually benefit the user of power but notnecessarily always beneficial to those being dominated[6]

A conception of social and political power is similar to the physical world in

which energy is conceptualized as the ``capacity to do workrsquorsquo and which whenadministered over time is conceptualized as power ie horsepower In the



Corporatepower

737

world of social power by comparison the conception and analysis of poweralso relates to the capacity to work in the sense of a capacity for doing Such acapacity is necessary in order to accomplish certain ends and objectivesBertrand Russell concurs in addition to Galbraithrsquos connection of power to the

social sciences but he also draws an analogy to the physical world as well `Ìnthe course of this book I shall be concerned to prove that the fundamentalconcept in social science is Power in the same sense in which Energy is thefundamental concept in physicsrsquorsquo (Russell 1963 p 9)

The locus of social power meaning and basis when analyzing ecclesiasticalpower academic power the power of power eAcirclites the military industrialcomplex MNCs power in small groups or personality and its diffusion variesconsiderably The social units for analysis in terms of sovereignty and poweraddressed in this paper relate to two dominating social institutions of thecurrent period the nation state and the modern megacorporation

On an intranation-state basis corporations have long since been recognizedas the dominant institution But now the extent of corporate power is more farreaching ` Corporations have emerged as the dominant governance institutionson the planet with the largest among them reaching virtually every country inthe world and exceeding most governments in size and powerrsquorsquo (Korten 1995p 54) Corporations are as big as nations of the 100 largest units concernedwith production of goods and services 51 are MNCs and the other 49 arenations Only 23 nations are bigger than General Motors (Anderson et al 2000pp 12-19) And as noted previously private foreign direct investment thesignal empirical feature of the MNC is growing faster than global trade and

trade in turn is growing at rates faster than global production[7] Theacceleration of corporate power is at root based on economic production andgrowth And in Galbraithian terms production and growth are primarily basedon organizational structures and the resulting control over knowledge andtechnology It is this capacity to control knowledge applied and innovated ascorporate material and social technology which serves as the dynamic for thecornucopia of corporate production

The power of nation states also rests on an economic base of productionpredicated on a given level of technological advance We speak here of PaxBritannica and the reigning British hegemonic power which existed during the

nineteenth century British hegemony was predicated on the IndustrialRevolution which served as an economic base of production wealth and theensuing concomitant economic and political power Kohn a leading student of nationalism noted that the mid-eighteenth century was marked by threesignificant and interrelated events

(1) nationalism

(2) industrialism and

(3) democracy (Kohn 1944 p vii)

But what does nationalism mean and how is it related to industrialism and arepublican form of democracy Nationalism as a social institution and as with




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globalization constitutes a very complex phenomenon[8] Given the complexityof nationalism a relevant analysis is difficult in that it mandates aninterdisciplinary approach Consequently again granting an interdisciplinarycomplexity of the concept of nationalism it is also arguable that an analysis of

nationalism (and globalization as well) is integral and appropriately relegatedto the domain of the dynamics of culture evolution

The nation state comprises two separate ingredients The nation relates topeople and nationality on the one hand and the state by comparison relates topolity and political governance on the other Nationality and political governancewere combined in the formation of nation states during the CommercialRevolution circa 1350-1750 This synthesis constitutes the major politicaldevelopment of the period The expansion of trade which took place during thisperiod served as a primary factor to ultimately integrate the previouslyfragmented feudal units of production the manorial system into larger andintegrated national units Again an evolutionary process serving as an exemplarof the dynamics of culture diffusion via the agency of trade took place

But the origination of the nation state which took place during theCommercial Revolution did not constitute the advent of what has come to becalled nationalism[9] During this period the nation state was governed by themonarchy the king as sovereign The reign of the king as an absolutemonarch and associated policies could not be translated nor identified with theinterests of the people Therefore the loyalty of the people the nationalityelement was not directed or commensurate to the king as sovereign Thesynthesis of nationality to that of the state took place with the innovation of arepublican democratic form of government This resulted in a shift of sovereignty from the king to ``we the peoplersquorsquo Nationalism originated whenloyalty was directed to the state via a republican form of government in thatnow the state represented ` we the peoplersquorsquo (Carr 1945)

The American and French Revolutions of the late eighteenth centuryinnovated the institution of nationalism as a major social institution (socialtechnology) of the modern era A republican form of government transferredsovereignty from that of the king to that of ``we the peoplersquorsquo This transfer of sovereignty also nurtured a loyalty to the state in that the state now came to

represent ``we the peoplersquorsquo Consequently a given populace demarcated by thesame nationality was now willing to even die for the state ``Give me liberty ordeathrsquorsquo and ` my country right or wrongrsquorsquo served as clarion calls marking the birthof modern nationalism In asserting the rights of ``we the peoplersquorsquo and driven bythe newly formed social institution known as nationalism the AmericanRevolution constituted the first anti-colonial revolution of the modern era

Nationalism and republicanism were interwoven during the mid-eighteenthcentury with industrialism as the basic dynamic of modern economic growthIt is consequently the industrial process which granted power to the social unitknown as the nation state Nationalism which in its origins was ostensibly

oriented to promote the interests of the collective whole as ``we the peoplersquorsquo hasnot always produced positive results Nationalism and its underlying



Corporatepower

739

patriotism came to be misguided and misdirected in its control by a minoritypower of power eAcirclites as opposed to the majority in terms of ``we the peoplersquorsquoThe most negative manifestation of nationalism having gone berserk appearedduring the 1930s in Nazi Germany

But there are many other problems that can be associated with nationalismThe nation state which delineated the boundaries for loyalty was establishedprior to the advent of the Industrial Revolution Given the agrarian base of theeconomy characterizing the period demarcated as the Commercial Revolutionthe boundaries of the nation state were consequently adequate in terms of market size and prerequisite raw materials However with the onset of theIndustrial Revolution nation states came to require larger markets and anexpanded base of raw materials extending beyond their given geographicalboundaries This was provided for by the evolving multilateral network of world trade which originated during the 1870s discussed previously

When this network of trade collapsed during the 1930s exacerbated andinterrelated to the Great Depression nation states had to fall back on thelimited market size and resource base contained within their geographicalboundaries And while such boundaries proved adequate during an agrarianphase of development circa the Commercial Revolution such limitedboundaries were inadequate and did not suffice for nation states in the throes of modern economic growth Given the economic anomalies contained in highlevels of unemployment and collapsed production which took place during the1930s nationalism became intensified and increasingly belligerent But loyaltynow intensified came to be contained by limited geographical boundarieswhich in turn limited market size and a prerequisite resource base Suchlimitations were incompatible with the needs of a nation in the stage of moderneconomic growth When trade collapsed during the 1930s the intensifiedloyalty became militant and was directed toward achieving the requiredexpanded market size and raw materials through militant aggression Europein the intensified nationalism of Nazi Germany was now going to be integratedby military force and aggression The hub of this ``new orderrsquorsquo in the promotionof human rights was to be located not in London but in Berlin

This intensified nationalism was manifest in a horrific world war of untold

destruction of life and material well-being From this experience it becameevident that Europe could no longer embark on military aggression fed by thefires of red-hot supernationalism The post-Second World War period marked amovement toward a prerequisite integration of Europe through peacefulpolitical means oriented toward supranationalism This appeared in themovement toward the EEC and the later EU the objective being to definenation-state boundaries based upon economic prerequisites concomitant to theneeds of modern economic growth rather than being demarcated by nationality

Given the experience of the 1930s nationalism came to be universallyviewed in very negative terms As a result the quest became directed toward a

replacement of supernationalism with that of supranationalism The transitiontoward a ` suprarsquorsquo approach directed toward being ` aboversquorsquo that of the nation fed




299

740

by the force of nationalism became the desideratum This favorable attitudetoward supranationalism in turn spilled over to multinational corporations inthat they also constituted a force directed toward a supranational solution Butis nationalism all that bad

Nationalism as comprising the collective will of ` we the peoplersquorsquo embedded inpatriotism has a very positive potential if directed by a majority of the populacein the mold of a participatory democracy and a spirit of community For examplewhen the democratic process was transformed from that which was called a` liberalrsquorsquo democracy to that of a ` massrsquorsquo democracy it promoted a structuraltransformation appearing in the form of the new deal The anomalies of theperiod produced a gestalt switch from that of a laissez-faire policy orientation of mainstream economics to that of the welfare state and Keynesian economics Thespirit of ``we the peoplersquorsquo now given greater political franchise in the form of a` massrsquorsquo democracy became a very powerful agency for social reform

For different reasons Veblen in portraying the horrors of the 1930s bycomparison evaluated nationalism in very negative terms In typical Veblenese``Born in iniquity and conceived in sin the spirit of nationalism has neverceased to bend human institutions to the service of dissension and distress Inits material effects it is altogether the most sinister as the most imbecile of allthose institutional incumbrances that have come down from the old orderrsquorsquo(Veblen 1997 pp 11-39 38-9)

Myrdal however as another institutional economist drew attention to apotentially positive or instrumental function of nationalism Also as theanalytical father of the developmental state Johnson (1995) along with Myrdaldraws attention to a positive role played by nationalism in the process of economic development As with material technics social technics qua socialinstitutions can also serve instrumental functions and need not alwayscomprise the ceremonial or imbecile as to function Myrdalrsquos (1957) Rich Landsand Poor offered a basic sequential paradigm of economic developmentNationalism was crucial in that it served as a force in the promotion of apolitical revolution which in turn was necessary to achieve political andeconomic independence Independence in the framework of circular andcumulative causation is necessary for the LDC world in order to pursue

policies in the promotion of industrialization and modern economic growthThe historic role model for Myrdalrsquos economic framework for development isempirically supported in the experience of the USA The birthplace of modernnationalism took place in the context of the American Revolution which led toindependence and a social invention in the form of the US Constitution andwhich in turn established the foundation for Hamiltonrsquos (1791) Report on Manufactures All of this was crucial in the promotion of the ultimate take-off of the US economy into the stage of modern economic growth Veblenrsquos critiqueof nationalism relates to a mature phase of the institution in which the controlof patriotism is directed toward of by and for eAcirclites intent on promoting their

own power and interests By comparison Myrdal dealt with nascentnationalism which played a positive role in the context of by and for ``we the



Corporatepower

741

peoplersquorsquo in the break from colonial rule in promoting the dynamics of economicdevelopment

Therefore as a basic conclusion technology as a whole be it material orsocial may function in positive or negative ways depending on who and or

what has the power to control and direct that technology and for which purpose(Brinkman 1997) Nationalism as a form of social technology directed by ``wethe peoplersquorsquo need not be isolationist or protectionist In fact the patriotism orcommunity spirit contained in nationalism can produce positive andhumanistic intranational results exemplified by the new deal Andinternationally that same spirit could be used to promote global treatiesanalogous to the UN Declaration of Human Rights of 1948 and the more recentInternational Covenant on Economic Social and Cultural Rights of 1966[10]Therefore the desire and will of the American people could ostensibly besupportive of the achievement of human rights in the domain of the social andthe economic This potential and collective will is currently being thwarted byconservative corporate and power eAcirclites

Consequently the locus of sovereignty contained in the nation state versusthe MNC is crucial in determining the fulfillment of a democratic agendadirected toward the achievement of basic human rights While nation-statepolicy directed toward intranational or international objectives can potentiallybe directed by the will of ``we the peoplersquorsquo as a participatory democracy such isnot the case vis-aAacute -vis the MNC Though as big as nation states the MNC is notgoverned by the populace in total as ``we the peoplersquorsquo By comparison themegacorporation is directed by a few in terms of corporate and power eAcirclitesThe resulting 2080 society hardly denotes a fully participatory democraticsociety (Martin and Schuman 1998 pp 1-11)

Corporate policy is not subject to direction by the will of a majoritycontained in ``we the peoplersquorsquo The corporation constitutes an institution of enormous power and formulates policy impacting the whole of the USpopulace but outside the realm of a participatory democratic process of thepopulace as a whole Therefore the locus of sovereignty in either the nation-state or the MNC is of crucial importance in determining how the process of globalization will be directed and who benefits The resolution of the

sovereignty debate is consequently fundamental in determining if the path willbe toward the promotion of basic human needs and rights or simply to that of enhancing corporate power and profits

In a study very supportive of the current process of globalization theauthors state ` The claim that globalization has cost the USA its sovereignty isintellectually bankruptrsquorsquo (Burtless etal 1998 p 126) This view put forth by theauthors of Globaphobia is very much subject to debate While Korten may beincorrect in terms of analysis and conclusions one would be hard pressed todeclare him intellectually bankrupt Korten (1995 p 12) by comparison statesthat the current period marks ` a crisis of governance born of a convergence

of ideological political and technological forces behind a process of economicglobalization that is shifting power away from governments responsible for the




299

742

public good and toward a handful of corporations and financial institutionsdriven by a single imperative ndash the quest for short-term financial gainrsquorsquo InVeblenian terms CEOs have been institutionalized to pursue the making of money and profits rather than production serviceable to basic human needs

Corporate leaders are intent to maximize profits without considerations of social responsibility

The argument usually put forth in the media and by mainstream economistsis that the primary danger to be addressed is that the globalization processmight be taken over by protectionist groups and thereby thwart the potentialbenefits to be derived from liberal free trade policies Rodrik draws attention toa basic paradox in that ostensibly the whole GATT-WTO system is directedtoward avoiding capture and control by interest groups intent onprotectionism ` Yet in practice it turns out that the agenda of tradeglobalization trade expansion and trade pacts has been captured largely bybusiness interestsrsquorsquo (Rodrik 1998 p 94 1997) What has been the result of policies pursued and advocated as a result of MNC power and dominanceWhat happens when corporations rule the world

Corporate globalization at bayGalbraith (1973b p 5) has stated ``Perhaps the oldest and certainly the wiseststrategy for the exercise of power is to deny that it is possessedrsquorsquo Butcorporations today do not have to deny their power this is done more thanadequately in the paradigm of rigorous orthodox economic theory ` Theeconomics profession serves as its priesthoodrsquorsquo (Korten 1995 p 69) Accordingto mainstream economic theory the real power and control reside in theideological base of a free-market process directed by the ``consumer as kingrsquorsquoAnd it is the free-market process which accounts for the cornucopia of production And in the inherent freedom of choice a free-market system servesas a concomitant necessary to the nurturing of a free and democratic societyMany others however have come to question the democratic correlation(Anderson et al 2000 p 62 Nader and Wallach 1996) Given such benignresults of a free-market process the objective is to get the government out in thatit constitutes the problem not the solution But in getting the government out

through the front door corporate power comes in via the back door Thegovernment which Myrdal categorizes as the state serving as the onlyconceivable agency capable of regulating and controlling corporate power isremoved from the scene Consequently the current period is more correctlydelineated as megacorporate globalization rather than free-market globalization

To be recalled it is our position that at the most general level of conceptionthe movement toward a global economy relates to the processes of generalculture evolution and diffusion This is not necessarily to infer a spread ordiffusion of Western culture per se in terms of given values ethics or religionBut rather this is to infer the spread of the dynamics of modern economic

growth as a science-based (useful knowledge) technology which may bematerial or social Technology so originated can be used to advance the given



Corporatepower

743

values embedded in a specific culture to maintain the integrity and diversity of that culture rather than necessarily emulate the particular values andobjectives of Western civilization (culture) The USA Japan Germany andRussia have all embraced the dynamics of modern economic growth and yet

they all represent diverse cultures Therefore while the spread of what may becalled corporate globalization may lead to a homogenization of culturesdominated by corporate cultural values policies and a lack of diversity suchneed not be the case

General culture evolution is predicated on the dynamics of technologicaladvance as the ``core of culturersquorsquo For without this technological advance whichhas produced a shrinking of time and space and a disappearance of bordersthe current processes of globalization could not take place Consequently `` globalization is a process integrating not just the economy but culturetechnology and governancersquorsquo (UNDP 1999 p 1) The question again becomesGalbraithian who controls this process and for which purpose Who should bein control the public as ` wersquorsquo in a democratic polity or the private as ` mersquorsquo in alegal person known as a corporation

The basic agency serving as the `ùmbilical cord of culture diffusionrsquorsquo iscontained in the processes of international trade But orthodox trade theorywhich ostensibly should deal with this dynamic of culture diffusion is woefullyinadequate to describe analyze and explain the process But why To beginwith free trade essentially constitutes a policy of international laissez-faire Thisobvious conclusion is supported in the literature For example in his Essays inPersuasion Keynes (1972 p 278) states ` Here we have the economic doctrine of laissez-faire with its most fervent expression in free trade fully clothedrsquorsquo Laissez-faire in practice obviously does not mean no government but in reality and inapplication constitutes a policy of no regulation of business enterprise

As a practical matter it is not conceivable today assuming any semblance of a democratic polity to have laissez-faire dominate the policies at the nation-state level The Nobel laureate Paul Samuelson states ``Capitalism in the senseof undiluted laissez-faire died before Queen Victoria died And most of thisbook has been concerned with the mixed economy that buried itrsquorsquo (Samuelson1970 p 820 Keynes 1972 pp 272-94) Nonetheless it is inconsistently argued

that free trade as international laissez-faire and free markets be used toorganize and control the global economy A laissez-faire policy has not workedfor the nation-state in isolation still less might we expect it to work for theglobal economy The global economy is far more complex than any givennational economy in that it consists of many heterogeneous and diversecultures at various levels of economic development It does not appear possiblethat the price mechanism and profit maximization alone will suffice as thebasis of socio-economic organization for such a global complexity ndash with theexpectation that it will work in manifesting benign and harmonious results

The liberal trade policies which were implemented during the Bretton

Woods era were predicated on the orthodox ``pure theory of tradersquorsquo whichexisted and dominated during this period But this theory of trade not only




299

744

contained ``whopperrsquorsquo assumptions completely unrelated to empirical realityThe internal logic of the theory itself is seriously flawed (Lovett et al 1999 pp106-35) The theory rests on a value system which entails an outward shift of the production possibilities frontier impacting an indifference map as the basis

of ``gainsrsquorsquo from trade Consequently the theory does not submit to a cardinalmeasure such as found in GNP data a quality of life index (QLI) or a genuineprogress indicator (GPI) but simply relies on higher ordinal levels of totalsatisfaction which defy statistical measure

Perhaps the major problem inherent in the logic of the pure theory of traderelates to its reliance on the static ` lawrsquorsquo of comparative advantage It isoxymoronic to apply a static theory to a dynamic and evolutionary processThe theory is static in that technology is taken as a given and is contained inhomogeneous production functions for all nations But it is generally concededtoday that the dynamics of technological change constitutes the sine qua non of the dynamic processes of economic development The theory offers aconceptual ` logicrsquorsquo that an outward shift in the production possibilities curve aseconomic growth constitutes a conceptual equivalent to that of the process of economic development But the process of economic growth is not synonymouswith the process of economic development (Brinkman 1995)

An outward shift of the P-P curve assumed to be synonymous with economicdevelopment is based on Marshallian offer curves and the derivation of theinternational terms of trade which represents the ``gainsrsquorsquo from trade The newlyderived international terms of trade was assumed to be the same `às ifrsquorsquo the P-Pcurve had shifted when in actuality in real terms it did not Consequently whenthe dust finally settles in the Edgeworth-Bowley box what the analysis boilsdown to is that a change in the international price as an improved internationalterms of trade is the conceptual equivalent to that of the process of economicdevelopment The alleged logic of that position defies logic

It would take a heroic level of rationalization to argue that the pure theory of trade is relevant to any analysis of the globalization process taking place todayIn fact by assuming that capital is immobile internationally a ` whopperrsquorsquoassumption beyond compare the theory by assumption excludes an analysis of the MNC Consequently the rise of the MNC as one of the most significant

developments of the post-Second World War era was assumed to be non-existent But recall that the pure theory of trade was the theory in place duringthe formulation of the Bretton Woods system Liberal trade policy soformulated was predicated on the free trade policy derived from the pure theoryof trade Given the many flaws of the pure theory of trade contained in thetheory itself as well as in the underlying ` whopperrsquorsquo assumptions it isunderstandable and predictable that orthodox trade theory would finally havebeen pressured to undergo a metamorphosis

Currently there are attempts being made by orthodox neoclassical tradetheorists to introduce the new growth theories and technological change into

trade theory in order to originate a dynamic theory of comparative advantage(Grossman and Helpman 1993) But such attempts basically avoid the issues of



Corporatepower

745

corporate globalization as put forth in this paper Corporate power and thesovereignty issue are not discussed let alone the dynamics of general cultureevolution Essentially what these theories offer is increased elegance at theopportunity cost of decreased relevance[11]

In fact a conceptual clarification of corporate globalization is not addressedlet alone offered in the literature of the orthodox trade theories now being putforth Perhaps a current theory of trade which comes the closest to addressingan international diffusion of technology and therefore culture evolution aswell appears in the work of Vernon (1966 1979) and the theory of the product-life cycle However in the context of the product-life cycle as theory the issuesof corporate power and sovereignty are avoided Vernon (1971 1977 1998)elsewhere however has of course made significant contributions to thesovereignty issue vis-aAacute -vis the MNCs

Although it is arguable that the current orthodox theory is inadequate doesthis carry over to a conclusion that free trade as to policy is consequentlyflawed as well Has not liberal trade policy nonetheless produced benignresults flawed theory aside Regardless of the shortcomings of theory as abasis for explanation does not aspirin nonetheless still work and thebumblebee still fly Consequently does the policy of free trade still fly althoughexplanations and theory offered in support are still wanting

As a result of the liberal trade policies pursued during the GATT-WTO erahave not international trade and global economic growth experienced decidedincreases As previously discussed trade has increased faster than productionand foreign direct investment has increased faster than the increases in tradeThe numbers are there in support of the fact that national economies haveexperienced an increased internationalization and have grown as a resultNominal exports and imports as a percent of nominal output for industrialcountries were 246 percent for 1966-69 and 368 percent for 1980-89 Fordeveloping countries the comparable figures are 28 percent and 384 per centUS long-term foreign direct investment at historic cost has increased from$118 billion in 1950 to $7116 billion in 1995 Measured in market value thefigure for 1995 is $13 trillion Consequently while a positive potential exists inthe expansion of the global economy the problem resides essentially in the

realm of equity and fairness How has that expansion impacted incomedistribution wages the environment and the human quality of life on a globalas well as internally on a national basis Who really has benefited from thedramatic economic expansion of the global economy

For while ` The collapse of space time and borders may be creating a globalvillage not everyone can be a citizenrsquorsquo and reap the benefits (UNDP 1999 p 31)The Pearson Report of 1969 stated that ` The widening gap between thedeveloped and developing countries has become a central issue of our timersquorsquo(Pearson 1969 p 1) Three decades later the problem is still with us and gettingworse For example using the Lorenz curve as an indicator Zimmerman (1965

pp 39-40) found that for the period between 1860-1960 the curve moved awayfrom the line of equality `` income distribution has considerably deteriorated




299

746

during the last centuryrsquorsquo (see Figure 3) Lorenz curves and other estimates relatedto the more recent period also indicate the trends toward growing inequality anda widening of the gap between the rich and poor nations of the world Forexample `Ìn 1960 about 72 percent of total international inequality could be

attributed to inequality between the OECD and LDCs By 1990 this share hadincreased to 81 per cent therefore indicating a further widening of the incomegap between the `Northrsquo and the `Southrsquo over the last three decadesrsquorsquo (Chen 1998pp 103 97-116 Leavy-Livermore 1998 pp 29-62)

Other measures offer an unbelievable ` mind-bogglingrsquorsquo indication of increased global inequalities in terms of wealth and income distribution In1997 for the `ùltra richrsquorsquo 225 of the richest individuals had a combined wealthof over one trillion dollars which is the equivalent of the annual income of 25billion people or 47 percent of the total global population Three of the richestpeople had combined assets equal to the total GDP of 48 of the poorest LDCsassets of 15 of the richest equaled the total GDP of Sub-Saharan Africa 32 of the richest had assets equal to the total GDP of South Asia 84 of the richestindividuals had assets greater than the total GDP of China a nation consistingof 12 billion people (UNDP 1998 Box 13 30)

Although some view market failures as mythology (Gregory 1986)statistical evidence is in support of the failure of free markets to produce agreater equality of income distribution And in fact without equivocationinequality is worsening and the gap is currently widening given that theLorenz curves are shifting in an outward direction If predictable resultsconstitute a vindication of a theory Myrdalrsquos theoretical framework has clearlybeen vindicated by the accumulated empirical evidence in relation to global

Figure 3Lorenz curves for world

income 1860 and 1960



Corporatepower

747

income distribution Myrdalrsquos (1957) thesis and theory as put forth in his RichLands and Poor serve to predict that unregulated markets and a free-tradelaissez-faire predilection would result in a growing increase in incomeinequality between rich and poor nations And further that the increased gapbetween the rich and the poor would be manifest in increased global andinternational conflict

` The basic underlying philosophy of the WTO is that open marketsnondiscrimination and global competition in international trade are conduciveto the national welfare of all countriesrsquorsquo (Hoekman and Kostecki 1995 p 1)Clearly the intent of the WTO to improve ` welfare of all countriesrsquorsquo has as yet tobe realized The current problems associated with the process of globalizationnow taking place do not simply relate to the growing gap of incomedistribution between the rich and poor on a global basis The results of the

globalization process are far more complex The globalization process entailsthe overall complexity of culture and as such involves not only theinternational sector but radiates back to the national economy as well Thecurrent process of corporate globalization now taking place is at bay as a resultof its national and international impact on wages downsizing part-time workthe ``race to the bottomrsquorsquo environmental degradation and the overall quality of life The literature is replete with an intense questioning of a continuity of globalization policies now in place

As a bottom line one basic source of contention appearing in the literature isthat the current processes of globalization are predicated on a free-market or

laissez-faire ideology In his focus on ``corporate libertarianismrsquorsquo Korten (995 p69) states `Ìn the quest for economic growth free-market ideology has beenembraced around the world with the fervor of a fundamentalist religious faithrsquorsquoThe billionaire George Soros argues that the greatest threat today given thedemise of the USSR is no longer that of communism But rather is contained in` the capitalist threatrsquorsquo embodied in ` the untrammeled intensification of laissez-faire capitalism and the spread of market values into all areas of life isendangering our open and democratic societyrsquorsquo and ``The central contention of this book is that market fundamentalism is today a greater threat to an opensociety than any totalitarian ideologyrsquorsquo (Soros 1997 p 45 1998 p xxii)

Soros uses ``market fundamentalismrsquorsquo in place of laissez-faire in that it givesemphasis to the religious fervor contained in the current frenzy directed by afree-market ideology ` easily carried to extremesrsquorsquo (Soros 1998 pp xx 126-8)And replete as a theme put forth by Korten (1995 p 12) ``These forces of amarket tyranny that is extending its reach across the planet like a cancercolonizing ever more of the planetrsquos living spaces destroying livelihoodsdisplacing people rendering democratic institutions impotent and feeding onlife in an insatiable quest for moneyrsquorsquo Clearly the current corporateglobalization process and the structure of the global organization of trade

established under the WTOrsquos rules of the game leaves much to be desired andmuch to be questioned




299

748

Globalization with a human faceThe United Nations Development Programme (UNDP) and the related Human Development Reports have produced vanguard contributions to the literaturerelevant to the current processes of globalization The objective of an integrated

global economy does not simply relate to the promotion of economicdevelopment per se What is necessary is to use the dynamics of developmentas a means not as an end in itself which is oriented toward the promotion of ahuman development strategy A strategy that is controlled via a participatorydemocracy of by and for ` we the peoplersquorsquo and globally more correctly for ` wethe peoplesrsquorsquo Such a strategy potentially constitutes a collective patriotic forcefor solidarity in the promotion of a just global order for all the people ratherthan one driven by greed and profits for an eAcirclite few

Polanyi was very much concerned with the impact of the price and marketmechanism on society Soros also notes the connection for given ` marketfundamentalismrsquorsquo the result has been ` the development of a global economy hasnot been matched by the development of a global societyrsquorsquo (Soros 1998 pp vxx xxix) The dysfunction of society is also addressed by Korten (1995 p 19)``These conditions are becoming pervasive in almost every locality in the worldndash and point to a global-scale failure of our institutionsrsquorsquo

` The WTO is essentially not concerned with the behaviour of privatebusinesses It deals only with actions of governments Thus the WTO is aregulator of the regulatory actions of governments that affect trade rsquorsquo(Hoekman and Kostecki 1995 p 12) The UNDP (1999 pp 97-114) provides anexcellent summary of policy directions related to ` Reinventing globalgovernance

ndash for humanity and equityrsquorsquo A specific recommendation by the

UNDP is particularly relevant ` The mandate of the WTO needs to be expandedto give it àntimonopolyrsquo functions of the activities of multinational corporationsincluding production working in close collaboration with national and antitrustagenciesrsquorsquo (UNDP 1999 p 114) And of course this is not to deny increasedmanagement and regulation in the areas of human needs and rights wagepolicies and the overall impact on the environment and the quality of human life

In summary the position put forth in this paper is not anti-market nor anti-corporation per se but rather is anti-laissez-faire and opposes the unmitigated

corporate power that is used to maximize profits without social responsibilityThe overall problem might best be viewed as a cultural lag (Brinkman andBrinkman 1997) In the crucible of globalization we find a cultural lagcomprising one aspect of nonmaterial culture (the MNCs) accelerating andadvancing faster than another form of nonmaterial culture residing in acapacity for governance To overcome this basic cultural lag there is the needfor nation-states and the global economy to be controlled of by and for ` we thepeoplersquorsquo in the spirit of solidarity and in context of a legitimate participatorydemocracy There is a need to assert human needs as human rights in therapidly emerging global economy

Currently the dialogue that is spread promulgates the view that patrioticworking America should endure the pain of stagnating real wages and



Corporatepower

749

downsizing in the policies now being pursued Such Low Road wage-costcutting policies produce gain for corporate America and a good deal of pain forworking America[12] Nationalism and the patriotic spirit should and could beused to promote gain not pain This relates to policies both intranational andinternational as well as supranational There is a need to promote greatergovernance of the globalization process but ``Governance does not mean meregovernment It means the framework of rules institutions and establishedpractices that set limits and give incentives for the behaviour of individualsorganizations and firmsrsquorsquo (UNDP 1999 p 9) ``The globally integrated worldwill require stronger governance if it is to preserve the advantages of globalmarket competition and to turn the forces of globalization to support humanadvancersquorsquo (UNDP 1999 p 13)

Notes

1 Compare for example Krueger (1998 p 46) OECD (1993 pp 7-11) Chen (1998 pp 2 103)Holton (1998 pp 10-24) Leavy-Livermore (1998 p xxii) all of which indicate a lack of consensus Conceptual clarification however is necessary to establish paradigmaticboundaries for questions problems and policy direction for resolution

2 References to the importance of culture appear elsewhere in the literature for exampleUNDP (1999 pp 2 4 103) Featherstone (1990) Robertson (1992) and Axford (1995) Ourusage of culture and the dynamics of its evolution relates to the Veblen-Ayres traditionmanifest in institutional economics

3 Kuznets (1930 432-3) The emphasis on the social and structural change and the dynamicsof a science-based technology is replete in Kuznetsrsquos contributions to the literature and the

need for ``developing a tested theory of social evolution

rsquorsquo (Kuznets 1930 p 441)4 Svennilson (1954) focused on the need for structural change and institutional adjustments

in order to overcome the quagmire of Europersquos interwar stagnation

5 Much has been written on the sovereignty issue for example Vernon (1971 1977 1998)Featherstone (1990) and Arnason (1990)

6 On a conception of power Brady (1943) Business as a System of Power Dowd (1997 pp 93-125) Bowman (1996 pp 93-125) Berle (1969) Sklar (1983) Rothgeb (1993) and Galbraith(1973a 1983)

7 On the FDI trade and the production relationship Meier (1998 pp 24-5 133-44) Chen(1998 pp 45-96) Anderson et al (2000 pp 12-19)

8 Snyder (1954) found nationalism to be so complex that he concluded that it could not bedefined and on an earlier statement as to the interdisciplinary nature of nationalism andconsequently its complexity Deutsch (1956) which serves as a basis for our conclusion asto the relevancy vis-aAacute -vis the complexity of culture Nationalism is in turn is obviouslyrelevant to globalization (Featherstone 1990 p 208)

9 Our analysis draws on the work of Carr (1945) a work which Deutsch (1956 p 43)regarded highly ``The best summary presentation of the profound social economic andpsychological changes in nationalism dotsrsquorsquo

10 As noted in the UNDP (1998 p 245) along with South Africa and China the USA hassigned but has not yet ratified the International Covenant on Economic Social and CulturalRights (1996) A similar fate was granted to the UN Declaration of Human Rights (1948)

11 The work of Grossman and Helpman (1993) stands as one of the leading exemplars of newtrade theories However it does not delve into the arena of MNC power and the associated




299

750

social and cultural implications of corporate globalization Textbooks similarly avoid theissue of MNC power in terms of analysis and theory in this context note Salvatore (1998)

12 While the media and mainstream economist allude to the health and vigor of the currentgrowth phenomenon and its favorable impact on ``we the peoplersquorsquo others are not quite that

sure (Mishel et al 1999 Miringoff and Miringoff 1999)

References

Anderson S Cavanagh J and Lee T (2000) Field Guide to the Global Economy The New PressNew York NY

Arnason JP (1990) `Nationalism globalization and modernityrsquorsquo in Featherstone M (Ed) Global Culture Nationalism Globalization and Modernity Sage Publications London pp 207-36

Axford B (1995) The Global System Politics Economics and Culture St Martinrsquos New York NY

Berle AA (1969) Power Harcourt Braceamp World New York NY

Bowman SR (1996) The Modern Corporation and American Political Thought Law Power and

Ideology Pennsylvania State University Press University Park PABrady RA (1943) Business as a System of Power Columbia University Press New York NY

Brinkman RL (1995) `Èconomic growth versus economic development toward a conceptualclarificationrsquorsquo Journal of Economic Issues Vol 31 December pp 1171-88

Brinkman RL (1997) ``Toward a culture conception of technologyrsquorsquo Journal of Economic IssuesVol 31 December pp 1026-38

Brinkman RL and Brinkman J (1997) ``Cultural lag conception and theoryrsquorsquo International Journal of Social Economics Vol 24 pp 609-27

Burtless G Lawrence RZ Litan RE and Shapiro RJ (1998) Globaphobia BrookingsInstitution Press Washington DC

Carr EH (1945) Nationalism and After Macmillan New York NY

Chen J (1998) Economic Effects of Globalization Ashgate Publishing Brookfield VT

Deutsch KW (1956) An Interdisciplinary Bibliography on Nationalism 1935-1953 TheTechnology Press of MIT CambridgeMA

Dowd D (1997) US Capitalist Development since 1776 Of by and for Which People ME SharpeArmonk NY

Featherstone M (Ed) (1990) Global Culture Nationalism Globalization and Modernity SagePublications London

Feis H (1930) Europe the Worldrsquos Banker 1870-1914 Yale University Press New Haven CT

Galbraith JK (1973a) ``Power and the useful economistrsquorsquo American Economic Review Vol 63pp 1-11

Galbraith JK (1973b) Economics and the Public Purpose Houghton-Mifflin Boston MA

Galbraith JK (1983) The Anatomy of Power Houghton Mifflin Boston MA

Gilpin R (2000) The Challenge of Global Capitalism Princeton University Press Princeton NJ

Gregory P (1986) The Myth of Market Failure The Johns Hopkins University Press BaltimoreMD

Grossman GM and Helpman E (1993) Innovation and Growth in the Global Economy The MITPress Cambridge MA

Hamilton A (1791) Report on Manufactures reportpresented to congress 5 December

Hilgerdt F (1943) ``The case for multilateral tradersquorsquo American Economic Review Vol 33 Marchpp 397-407



Corporatepower

751

Hirst P and Thompson G (1996) Globalization in Question Polity Press Blackwell PublishersOxford

Hoekman B and Kostecki M (1995) The Political Economy of the World Trading System FromGATT to the WTO Oxford University Press Oxford

Holton RJ (1998) Globalization and the Nation-State St Martinrsquos Press New York NY

Johnson C (1995) Japan Who Governs The Rise of the Developmental State WW Norton NewYork NY

Jones RJB (1995) Globalization and Interdependence in the International Political EconomyPinter Publishers London

Keynes JM (1972) The Collected Writings of John Maynard Keynes Essays in Persuasion Vol IX Macmillan London

Kindleberger C (1969) American Business Abroad Six Lectures on Direct Investment YaleUniversity Press New Haven CT

Kohn H (1944) The Idea of Nationalism Macmillan New York NY

Korten DC (1995) When Corporations Rule the World Copublication of Kumarian Press andBerrett-Koehler Publishers West Hartford CT and San FranciscoCA

Krueger AO (1998) The WTO as an International Organization University of Chicago PressChicago IL

Kuznets S (1930) ` Static and dynamic economicsrsquorsquo American Economic Review Vol 20September pp 428-41

Kuznets S (1954) Economic Change William Heineman London

League of Nations Secretariat (1942) The Network of World Trade League of Nations Geneva

Leavy-Livermore A (Ed) (1998) Handbook on the Globalization of the World Economy EdwardElgar North Hampton MA

Lovett WA Eckes AE Jr and Brinkman RL (1999) US Trade Policy History Theory and theWTO ME Sharpe Armonk NY

Martin H-P and Schuman H (1998) The Global Trap Globalization and the Assault on Democracy and Prosperity Zed Books London

Meier GM (1998) The International Environment of Business Oxford University Press NewYork NY

Miringoff M and Miringoff M (1999) The Social Health of the Nation Oxford University PressNew York NY

Mishel L Bernstein J and Schmitt J (1999) The State of Working America 1998-1999 CornellUniversity Press Ithaca NY

Mittelman JH (Ed) (1997) Globalization Critical Reflections Lynne Riener Publishers BoulderCO

Myrdal G (1957) Rich Lands and Poor Harper New York NY

Myrdal G (1974) ` What is developmentrsquorsquo Journal of Economic IssuesVol 8 December pp 729-36

Nader R and Wallach L (1996) ` GATT NAFTA and the subversion of the democraticprocessrsquorsquo in Mander J and Goldsmith E (Eds) The Case against the Global Economy and

for a Turn toward the Local Sierra Club Books San Francisco CA

OECD (1993) Intra-firm Trade OECD Paris

Ohmae K (1995) The Evolving Economy Harvard Business School Press Boston MA

Pearson LB (1969) Partners in Development PraegerNew York NYPolanyi K (1944) The Great Transformation Farrer amp Rinehart New York NY




299

752

Pomeranz K and Topik S (1999) The World That Trade Created Society Culture and theWorld Economy 1400-Present ME Sharpe Armonk NY

Robertson R (1992) Globalization Social Theory and Global Culture Sage Publications London

Rodrik D (1997) Has Globalization Gone too Far Institute for International Economics

Washington DCRodrik D (1998) ` Has globalization gone too farrsquorsquo Challenge March-April pp 81-94

Rothgeb JM Jr (1993) Defining Power Influence in the Contemporary International SystemSt Martinrsquos Press New York NY

Russell B (1963) Power George Allen amp Unwin London

Salvatore D (1998) International Economics Prentice-Hall Upper Saddle River NJ

Samuelson PA (1970) Economics 8th ed McGraw-Hill New York NY

Sklar RL (1983) ` On the concept of power in political economyrsquorsquo in Nelson DH and Sklar RL(Eds) Toward a Humanistic Science of Politics Essays in Honor of Francis DunhamWormuth University Press of America Lanham MD

Snyder LL (1954) The Meaning of Nationalism Rutgers University Press New Brunswick NJSoros G (1997) ` The capitalist threatrsquorsquo The Atlantic Monthly Vol 279 March

Soros G (1998) The Crisis of Global Capitalism Public Affairs New York NY

Svennilson I (1954) Growth and Stagnation of the European Economy United NationsEconomic Commission for Europe Geneva

United Nations Development Programme (UNDP) (1998) Human Development Report OxfordUniversity Press New York NY and Oxford


Veblen T (1997) (1923) Absentee Ownership Transaction Publishers New Brunswick NJ

Vernon R (1966) ` International investment and international trade in the product cyclersquorsquoQuarterly Journal of Economics May pp 197-207

Vernon R (1971) Sovereignty at Bay The Multinational Spread of the US Enterprises BasicBooks New York NY

Vernon R (1977) Storm Over the Multinationals The Real Issues Harvard University PressCambridge MA

Vernon R (1979) ``The product cycle hypothesis in a new international environmentrsquorsquo Oxford Bulletin of Economics and Statistics November pp 255-67

Vernon R (1998) In the Hurricanersquos Eye The Troubled Prospects of Multinational EnterprisesHarvard University Press Cambridge MA

Zimmerman LJ (1965) Poor Lands Rich Lands The Widening Gap Random House New York NY

Further reading

Bhagwati J (1998) The Uruguay Round and beyond University of Michigan Press Ann ArborMI

Breuilly J (1993) Nationalism and the State University of Chicago Press Chicago IL

Greider W (1997) One World Ready or Not The Manic Logic of Global Capitalism Simon ampSchusterNew York NY

Stephenson H (1972) The Coming Clash The Impact of Multinational Corporations on NationStates The Saturday Review Press New York NY



Corporatepower

731

phenomenon by which markets and production in different countries arebecoming increasingly interdependent due to the dynamics of trade in goodsand services and the flows of capital and technologyrsquorsquo (OECD 1993 p 7) Whilesuch a market-oriented conceptualization appears relevant it does not go far

enough to include the social and cultural variables impacted by theglobalization process It also conceals the dynamics of structuraltransformation which have taken place over time in the evolution of whatmight be called a global economy The global economy has evolved over timeand that evolution is predicated on structural transformation

One approach toward a conceptual clarification is to draw a distinctionbetween two ideal types depicted as an international economy on the one handversus a globalized economy on the other (Hirst and Thompson 1996 pp 1-17Holton 1998 pp 23-4 42-9) In these two diverse models Hirst and Thompsonput forward the view that globalization constitutes a juggernaut of uncontrollable free-market forces In Globalization in Question they argue thatthis conception of globalization constitutes a myth not reality and that it `` robs us of hope rsquorsquo and amelioration from market failures in terms of governance at the national level A more relevant model is to depict the currentglobal economy as an international economy `` in which the principle [ sic]entities are national economiesrsquorsquo and still consequently capable of control andgovernance (Hirst and Thompson 1996 pp 2 6 8)

It is however still arguable that the global economy is none the less currentlyin a state of transition toward a new structure of international interdependenceled by MNC dominance and control And as such this process of globalizationso dominated constitutes a potential to unleash the inexorable force of freemarkets superseding national control If this view is correct the current globaleconomy is evolving toward the polarity of what might be called not simplyglobalization but rather corporate globalization Also that the locus of sovereignty might be conceivably shifting from the nation state to MNCshowever is not to assume that the process is irreversible and beyond thecapacity for national control and governance But this does not deny the factthat currently MNC power policy and values are increasingly coming todominate the global economy

Internationalization of national economies into what legitimately might becalled a global network of trade refers to a long-term process going back to themid nineteenth century This first stage took place in the context of nation-statesovereignty and control It refers to an interconnection of relatively distinctnational economies in which sovereignty was still predominantly relegated tothe nation state But a second stage manifest in a different structure is evolvingsomething new is taking place ``Globalization in its radical sense should betaken to mean the development of a new economic structure and not justconjectural change toward greater international trade and investment withinan existing set of economic relationsrsquorsquo (Hirst and Thompson 1996 p 7) What

constitutes this new structure And how then to analyze and explain that newstructure viewed as corporate globalization in relation to stage one




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1928



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1938




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(1) nationalism







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References



























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Further reading








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1928



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1938




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(1) nationalism







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Further reading







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1928



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(1) nationalism







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References



























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299

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Further reading








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1928



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1938




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(1) nationalism







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1938




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(1) nationalism







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(1) nationalism







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(1) nationalism







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Further reading








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299

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Further reading







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Further reading








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Further reading







Corporatepower

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Corporatepower

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Notes

















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Further reading








299

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Corporatepower

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Notes

















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References



























Corporatepower

751































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Further reading







Corporatepower

745











299

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Corporatepower

747











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Corporatepower

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Notes

















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References



























Corporatepower

751































299

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Further reading








299

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Corporatepower

747











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Corporatepower

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Notes

















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Corporatepower

751































299

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Further reading







Corporatepower

747











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748












Corporatepower

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Notes

















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750




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Corporatepower

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299

752






















Further reading








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Corporatepower

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Notes

















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Corporatepower

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Further reading







Corporatepower

749


Notes

















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750




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299

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Further reading








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References



























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Further reading







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Further reading








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Further reading





Documents

Corporate Power & Globalization